Glossary

A contract between the owner (lessor) and the tenant (lessee) stating the conditions under which the tenant may occupy or use real estate or equipment. Terms usually include a specific period of time and a predetermined rate.

An agreement between the commercial property owner and the lender that assigns lease payments directly to the lender.

Gross, Triple Net (NNN), Net Net (NN), Hybrid, etc.

The cost of improvements for a leased property, often paid by the tenant.

An amount earned by a real estate broker or leasing agent for his services.

The user of equipment or property being leased.

The party to a lease agreement who has legal or tax title to equipment or property, who grants the lessee the right to use the equipment or property for the lease term, and who is entitled to the rental fees.

Written communication issued by a lender in response to a request for funding a project; neither confirming a loan nor providing final terms under which the loan may be extended, an LOI simply states that the lender would consider that type of financing.

The rate that the most creditworthy international banks dealing in Eurodollars charge each other for large loans. Rates are quoted in monthly increments out to 1 year.

A lien is a Security Interest in property to secure repayment of an obligation. A Mortgage is a lien on real estate to secure repayment of the mortgage loan. A Tax Lien is a lien on real estate to secure payment of real estate taxes, a Mechanic's Lien is a lien on real estate to secure payment for work done on real estate, and a judgment lien is a lien to secure payment of a judgment. A lien on personal property such as machinery and equipment or accounts receivable is generally perfected by filling of a UCC financing statement and execution of a security agreement.

The restriction of one_s potential losses to the amount invested. The absence of personal liability. Provided to stockholders in a corporation and limited partners of a limited partnership.

One in which there is at least one partner who is passive and limits liability to the amount invested, and at least one partner whose liability extends beyond monetary investment.

A hotel that offers lodging services only.

Any fee charged to the borrower for packaging or assembling of their business loan application and supporting documentation.

The fee charged by a lender, to prepare all the documents associated with your mortgage.

Loan to Value is an important ratio for lenders. It is the amount of the loan divided by the value of the collateral taken as security for the loan (if there is a lien that will have a priority interest in that collateral, then the amount of that lien is deducted from the value of the collateral when determining the LTV.)

The ratio between the principal amount of the mortgage balance, at origination or thereafter, to the current value of the underlying real estate collateral. The ratio is commonly expressed to a potential borrower as the percentage of value a lending institution is willing to finance. The ratio is dynamic, and varies by lending institution, property type, geographic location, property size, etc.

A period of time after loan origination during which a borrower cannot prepay the mortgage loan.

Long Term Debt - Notes and other debt obligations with a maturity date longer than one year.

Total square footage of the land.

A commonly used expression referring to an office building that is too low to require an elevator.